What are two critical operating assumptions

Assignment Help Financial Accounting

Reference no: EM13140807

You are valuing Distress Company, a company struggling to hold market share. The company currently generates $120 million in revenue, but its revenue is expected to shrink to $100 million next year. Cost if sales currently equals $90 million and depreciation equals $18 million. Working capital equals $36 million and invested capital for the current year. You decide to build an as-is valuation of DistressCo. To do this, you forecast each ratio (such as cost of sales to revenues) at its current level. Based on this forecast method, what are operating profits and invested capital expected to be next year? What are two critical operating assumptions (identify one for profit, and one for capital) embedded in this forecast method

Reference no: EM13140807

Questions Cloud

What particular year depreciation amount for this asset will : This schedule shows that $60,000 will be depreciated for a particular calendar year. Instructions Show calculations to determine for what particular year depreciation amount for this asset will be $60,000.

Computing average markup percentage for setting prices : Compute the average markup percentage for setting prices as a percentage of the full cost of the product Nancy Company has budgeted sales of $300,000 with the following budgeted costs

Explain what is the piv required of the diode : What is the PIV required of the diode? A half-wave rectifier employing a 12-V-rms 60-Hz sine-wave source and no dc load is filtered using a polarized electrolytic capacitor having a small leakage current.

O compare and contrast your abilities as an academic writer : o Compare and contrast your abilities as an academic writer now as opposed to when you began your studies at the University of Phoenix. Using four comparatives and four superlatives within your responses,

What are two critical operating assumptions : Based on this forecast method, what are operating profits and invested capital expected to be next year? What are two critical operating assumptions (identify one for profit, and one for capital) embedded in this forecast method.

Computing the earnings per share : Compute earnings per share for 2010. Assume that financial statements for 2010 were issued in March 2011.

How many total moles of atoms does the sample contain : a sample of propane, contains 17.7 moles of carbon atoms. How many total moles of atoms does the sample contain.

Find or prepare the price-earnings ratio : Find or prepare the price-earnings ratio, the dividend payout ratio, the dividend yield, book value, and earnings per share, and identify whether you would consider this company a good investment,

Assess the company''s business strategy : Assess the company's business strategy as a cost and/or differentiation strategy and discuss how it achieved this leadership position.

User Account

All Pages